Wheelchair user Kornel Botosan filed a lawsuit under the Americans with Disabilities Act in 1998 after a trip to a Mexican restaurant in California. In the suit Botosan alleged that the restaurant did not have accessible parking, ramps, or bathrooms.
But Botosan did not sue the eatery itself. He sued Dorothy H. Fitzhugh, the landlord who leased space to the restaurant through a property trust.
His case became emblematic of a common question about the ADA: Who is legally responsible for ensuring that a business is compliant with Title III, the provision in the law that requires “public accommodation” of customers with disabilities? Is it the landlord, who owns the building, or the tenant, who runs the business that is open to the public?
So who is responsible?
The short answer is that both the landlord (or property owner) and the tenant (or business owner) bear legal responsibility for ADA compliance, and therefore bear liability risks for noncompliance. But there are nuances, depending on where the infraction occurred and the terms of the leasing contract they have signed with each other.
The liability is fairly clear for parts of the property controlled solely by the landlord, such as mall parking lots and walkways. According to the Polsinelli law firm, individual tenants are not liable for ADA noncompliance in these areas.
“But a landlord, as the owner of the property, can be held liable for ADA compliance on property leased to, and controlled by, a tenant,” writes Kelly Stohs, the former co-chair of the firm’s national real estate litigation practice group. “So, if the tenant operates a restaurant, the landlord may be held liable for ADA violations in the restaurant.”
Landlords frequently try to shield themselves from liability by including clauses in leases that state that tenants are responsible for complying with all laws, including the ADA. Such clauses, however, have limited power in that they are only applicable to disputes between the two parties who signed the lease — the property owner and the business owner — and don’t affect claims by third parties.
In other words, such leasing clauses do not prevent landlords from being sued for ADA infractions by members of the public. But they may allow landlords to file their own indemnification claim against the tenant later to try to recoup losses incurred because of the suit, including legal fees.
Contract fine print may matter
In the Botosan case, the Fitzhugh trust had a clause in its leasing contract with the Mexican restaurant that stated the restaurant was responsible for violations of law that occurred in the space it was renting. Fitzhugh’s attorneys attempted to have Botosan’s suit dismissed based on that clause.
But a federal court rejected their motion, stating that the Department of Justice’s own ADA guidance directly refuted Fitzhugh’s argument in a nearly-identical hypothetical example (a lawsuit related to a business called “XYZ Boutique” that rented space from “ABC Company”).
“The Department of Justice's pronouncement dooms Defendant's argument,” the judges wrote in their decision. “In the example, the landlord was liable for violations in the tenant's exclusive area. Moreover, the example makes clear that any allocation of responsibility is effective only between the tenant and landlord.
“Accordingly, the Court holds that a landlord cannot contract away its liability for ADA violations in areas of the premises that a tenant leases.”
While the ADA itself does not spell it out that starkly, the case law is clear: commercial landlords may be sued (along with their tenants) for ADA infractions that occur on their property — even if they’ve leased that property to someone else.